Monthly installments - meaning and composition

A loan is, in principle, nothing more or less than borrowed money from a private person or a commercial institution. The terms borrower (also debtor) and lender are used for the debtor’s and creditor’s sides. Whoever lends you money will usually not do so for free, but will charge interest. Interest represents the fee that is due for lending the amount. In the case of a classic installment loan, the accrued interest is paid monthly together with the principal repayment portion.

This creates a monthly installment made up of principal and interest that must be paid regularly over months or even years. Occasionally there are special offers that make the repayment of a loan interest-free for an initial period. However, the interest and thus the actual fee for borrowing the money should be considered over the entire term. The cheapest monthly installment is not always the best offer available on the loan market.

Details on repayment (for example special repayments) or other applicable fees and the degree of flexibility over the term are certainly things you should pay attention to as a borrower in the contract. Be sure to note how tightly you are bound to an offer and whether and when certain fees for your loan may become due.

Especially when adjusting the amount of the monthly installment upward or downward, costs can occur. Nevertheless, the monthly installment is the amount that is due each month and it should fit your living circumstances and not be set too high from the start.

Monthly installments must be tailored individually

If you decide on financing or a loan, a monthly installment for repayment or amortization will always result. The amount of the monthly installment should be chosen with care. It must never be higher than the income you have available. Ideally, the installment should be so small that it hardly affects you. But that has the disadvantage that with low installments the share of principal repayment is correspondingly small and the term therefore increases.

That does not always have to be a disadvantage. If you are young and want a bit more flexibility, you will not make a mistake by choosing a low monthly installment. As long as repayment still takes place and the amount can be paid monthly without problems, nothing speaks against a rate of your choice. However, in most offers the interest is usually higher if you opt for a longer term.

It is important that the installments match the borrower’s own financial circumstances. Life without major restrictions must still be possible, because special expenses will generally never cease. You should still be able to build reserves for emergencies of all kinds. Ideally, a consumer loan is so flexible that you can conveniently adjust a monthly installment. That way you can adapt the rate to your current life situation if such a step becomes necessary in the future. The risk is lower if you choose a rather long term and thus low monthly installments.

Monthly installments for loans from MAXDA

To find the right loan for you, we are also interested in which monthly installment suits you. For example, annuity loans are often chosen for mortgage financing. In an annuity loan the monthly payment is also called the annuity. During the fixed-interest period the annuity amount remains the same. This means that if interest rates decrease, more money can be used to repay the mortgage principal. For this type of loan and many other loans you can also find loan calculators online that help you determine the appropriate installment.

You are welcome to fill out a first non-binding loan application. We issue general-purpose loans between €1,500 and €250,000. With us you benefit from the great advantage of a universally valid interest rate of at least 3.99 %. This is independent of the term. That also means that you can ideally opt for a longer period and thus reduce the monthly installment. In this way you enjoy greater flexibility throughout the year without having to accept a higher interest rate.

We are happy to help you determine the right monthly installment for you and to advise you competently and without red tape. With us you do not have to wait long for the approval of your loan. We want to be at your side quickly. Therefore, loan approval with us only takes a few days. After you have completed the non-binding and free loan application, please send it to us — printed and signed. Please include a current payslip. If you have provided your e-mail address and telephone number, we will be happy to contact you and make you a suitable offer.

Repayment of your loan begins approximately 4 weeks after disbursement of the amount. This is when the first monthly installment becomes due. But you do not have to fear that you must strictly adhere to the predetermined term. If you wish, you can make an immediate repayment at any time. This allows you to repay all your obligations at once and settle your financing with a single monthly payment. We offer competent advice and fair offers while still providing the necessary leeway for changes in your life. We will find the right monthly installment and thus the perfect loan model for you.